Saipem loses court appeal against Jindal and ONGC

Vol 6, PW 26 (12 Mar 03) Exploration & Production

SAIPEM OF Italy has lost an important battle in its fight for the return of its drilling rig Perro Negro-3 from Jindal Drilling and ONGC.

On 21st February a two-judge 'division bench' of the Bombay High Court dismissed Saipem's appeal against an earlier ruling by judge R.J Kochar of the same court that the rig stay in India.

Judges H.L Gokhale and S.

J Vazifdar said they saw no merit in the points raised by Saipem. "The appeal will therefore have to be dismissed and we accordingly dismiss the same," they said.

Saipem argues Jindal should have returned the rig on 12th January when its contract with ONGC expired. ONGC and Jindal dispute this.

The appeal court accepted Jindal and ONGC's position that Perro Negro-3 should stay on in Indian waters to make good the period it was unlawfully sub-contracted by Saipem to sister company Agip in Iran while on a two-year contract in India. This period works out to 322 days, but ONGC told the appeal court it was willing to settle for 275 days.

Judge Gokhale used strong language against Saipem: "As pointed out by Mr Desai (ONGC's lawyer) Saipem has not approached the court with clean hands. It tried to wriggle out of the agreement even when the rig was undergoing repairs." The appeal court also expunged remarks by judge Kochar against Jindal over its dealings with Saipem.

"Neither ONGC nor Saipem were in a position to show anything from the record which even remotely suggested that Jindal had any pecuniary interest whatsoever in the Iran contract. The learned single judge's observations in this regard were not justified," ruled judge Vazifdar.